Did Your Financial Institution Funnel Your Uninvested Cash to Affiliated Banks for Low Interest Rates?

Grabar Law Office is investigating whether large financial institutions and their investment adviser affiliates have violated their fiduciary duties by funneling your uninvested cash into low interest-bearing accounts.

It is alleged that large financial institutions “swept” the uninvested cash balances in customers’ Discretionary Investment Accounts into interest-bearing bank accounts that paid unfairly low rates, thereby allowing these institutions to reap massive profits at the expense of their customers (the “Cash Sweep Programs”).

While the Discretionary Investment Account customers at these financial institutions received artificially depressed rates, these institutions and their affiliated banks earned enormous profits from their Cash Sweep Programs, including in the form of net interest income revenues, as well as fees and commissions from the accounts that swept through these Cash Sweep Programs.

Bloomberg reports that Robert Jackson, a law professor at NYU and former SEC commissioner, described this issue as a "trillion-dollar conflict of interest" affecting retail investors across the U.S. The United States Securities and Exchange Commission (SEC) is currently probing several firms to investigate whether these practices comply with their legal obligations.

Which Institutions Are Under Investigation?

Grabar Law Office is reviewing cash sweep practices at the following banks and investment advisory firms:

• American Enterprise Investment Services
• Ameriprise Financial Services
• Bank of America
• E*Trade Securities LLC
• Edward Jones
• Fidelity Investments
• J.P. Morgan Securities LLC
• JPMorgan Chase & Co.
• Merrill Lynch
• Morgan Stanley Smith Barney LLC
• National Financial Services, LLC
• PNC Financial Services Group, Inc.
• PNC Investments, LLC
• Raymond James Financial, Inc.
• Stifel Financial
• UBS Financial Services Inc.
• Wells Fargo Advisors

Who Does This Investigation Affect?

This investigation focuses on individuals and businesses with discretionary investment advisers—as opposed to those working with brokers who simply sell stocks on occasion. If your uninvested cash was swept into low-interest accounts with one of the institutions above, you could be entitled to recover damages.

Act Now to Protect Your Rights:

If you or your business has been affected by these practices, you may be able to recover damages and participate in future legal claims or service awards, at no cost to you. Don’t miss the opportunity to seek justice—contact us today!

Call Joshua H. Grabar at 267-507-6085 or email to [email protected]

Why This Matters:

Fiduciary financial institutions must act in the best interest of their clients. When firms funnel cash into their own affiliated banks at below-market interest rates, they place profits over customer interests. If this affected you, now is the time to explore your legal options.